Breakthrough: 4,6 billion dollar deal secures gas for Ukraine and EU

EU News 437/2014

IP/14/1238
Brussels, 30 October 2014

After seven rounds of gas negotiations, last night's talks moderated by Günther H. Oettinger, Vice-President of the European Commission, yielded finally a breakthrough: A 4,6 billion dollar winter package, agreed by Russia and Ukraine, secures gas for Ukraine - and ultimately also for Europe.

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The package covers the period from now until the end of March 2015 and includes the following main points:

• Debts: Ukraine would settle its debts based on a preliminary price of $268,5/ 1000m3 by making payments in two tranches: 1,45 billion dollar without delay, and 1,65 billion dollar by the end of the year 2014. This adds in total up to 3,1 billon dollar of debt payment. The final price and thus the final sum of debt will be determined through the pending arbitration by the Arbitration Institute of the Stockholm Chamber of Commerce between Gazprom and Naftogaz.

• New gas: Russia will deliver gas following advanced, monthly payments by Ukraine. The price is below $385/ 1000m3 and calculated according to a formula in the present contract and a price reduction through a discount in export duties by the Russian Federation. Ukraine is free to order as much gas as it needs and is not subject to take-or-pay obligations foreseen in the current contract. Ukraine foresees to purchase 4 bcm until the end of the year 2014, meaning 1,5 billion dollar.

Source and additional information:
http://europa.eu/rapid/press-release_IP-14-1238_en.htm?locale=en

EU/Russia/Ukraine trilateral meeting on gas, Brussels, 29/10/2014 (C)EU, 2014 URL

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